featuring guest authors; crafting tips and projects; recipes from food editor and sleuthing sidekick Cloris McWerther; and decorating, travel, fashion, health, beauty, and finance tips from the rest of the American Woman editors.

Wednesday, August 29, 2012

MONEY MATTERS WITH SHEILA - CREATING A PERSONAL FINANCIAL BUDGET


Today we have the folks at Happy Health visiting to discuss personal financial budgets. Happy Health provides useful lifestyle and product information, including home security reviews. Check them out at their website. -- AP 

Creating A Personal Financial Budget

Many people will go through life without ever putting together a budget for their household expenditures. Many others have created a budget but don't keep it current when they experience a change to income or expenses. This is too bad because knowing exactly what income you make and what your monthly expenses are is one of the key pillars to financial success. A well-managed budget ensures that one does not spend their way into consumer debt.

Early last year I had the opportunity to help a friend with her monthly budget. She was hopelessly in debt. After working with her on a monthly budget we, put a plan together to control her spending and help pay off her cards. Most importantly we checked her monthly progress against the budget we prepared. It was very hard for her to make the changes she needed to make but as every month went by she started to get better and better and staying with her budget. Even more exciting was that she was able to figure out ways to save even more money from her personal expenses.

Many people's financial dreams are ruined by their personal debt. Not all debt is incurred based on bad decision in incurring consumer debt. There are many people who have been dealt with some bad luck such as health problems and have been forced into debt just to ensure that they have appropriate health care. Regardless of how you have incurred your debt it is important to put together a personal budget to ensure that you have a plan for your future financial success.

I've spoken with many people who make a lot of money and they often think that they don't need a personal budget. I could not disagree more. In fact these types of people I believe need a budget more than others.  The reason for this is that while they make a lot of money including an excess of discretionary spending money they spend almost everything that they make. What they should be doing is carefully watching what income they make and their expenses and making sure that a respectful amount of their income is being reinvested into cash flow producing assets instead of wasted on expensive goods and services that they did not really need.  With a proper plan and good budget those who make a lot of money are able to continually reinvest their wealth producing a cascading flow of cash flow.

Make time out of your busy schedule to ensure that you have a personal budget. More importantly take time out of your schedule to make sure that you compare your budget to your actual real monthly expenditures. The road to financial success is not easy but ultimately it is very rewarding. Ensuring that you have a plan including a monthly budget is a step in the right direction in ensuring that financial success is not just a dream but a reality.


1 comment:

Cathy Shouse said...

This is a good reminder. Creating a financial budget can be a challenge in these days of ever rising food and gas prices.